13 Ways to Beat the Single-Person Penalty

Being single means never having money squabbles with a significant other. But it also tends to mean no one with whom to share financial goals. According to a new from TD Ameritrade, singles aged 37 and older are feeling insecure about saving, homeownership, and retirement.

And no wonder: They can’t file jointly at tax time, earn less than their married counterparts, and are more likely than those couples to live paycheck to paycheck, to invest less, and to be unable to buy homes.

If you’re 37 (or older) and single, you might remain that way for good. You might also be in your 20s and fully expecting to get married, or at least partnered, but you have no way of knowing whether that will happen. (Or whether it will last: As many as of U.S. marriages end in divorce.)

Male or female, you need to get real about your finances. Sure, it stinks that you don’t have someone with whom to share financial responsibilities (and, oh yeah, someone to love). But you have to play the hand you’re dealt – and to do it joyously, or at least intentionally, rather than feeling like you’re getting the short end of the stick.

This is also true for those who are happily single and those who are in relationships and decide not to live together, as well as for singles who are looking for Mr. or Ms. Right. Those of you who maintain separate residences also need to pay attention to your dollars. Here’s how.

1. Determine where you stand.

According to the Ameritrade survey, 40% of single people spend their entire salaries every month.

Do you know where your money goes? Time to figure that out.

Start by tracking your spending. For one month, write down everything you spend. Yes, everything: Small indulgences like a magazine or a package of beef jerky start to sound like real money when repeated regularly.

“It sounds so boring, but it’s one of the most important things you can do for yourself,” says Christine Russell, a senior manager for retirement and annuities with Ameritrade.

Do it for one month, she says, and you’ll have a clearer idea about your spending habits. How much went to things that weren’t strictly necessary or were quickly forgotten? What could those dollars have done for your long-range planning?

Break the cycle of aimless money use by creating a spending plan. The 50/30/20 budget is a simple way to direct your dollars where you want them to go: 50% of your money on needs, 30% on wants, and 20% on saving for the future. (Here are some more budgeting strategies you can try.)

And what do you do with the money you don’t spend? Start by making a vow to…

2. Save for retirement.

The most important line item on your money plan should be happening right now, even though it’s for the future. If your company offers a retirement plan, opt in immediately. And if there’s an employer contribution? Contribute at least as much as they’ll match.

Ultimately you’ll want to set aside 10% to 15% of your salary. That might be tough at first, especially if you’ve got student loans and a starter salary. But even if you can save only tiny amounts at first, do it. Compound interest is your friend. Manisha Thakor, author of “,” offers an example:

Suppose you save $25 a week ($1,300 per year) starting at age 25 and earn 7% returns. At age 65, that $1,300 will become $260,000 (or more, if you gradually bump up the amount you save). But if you wait until age 45 to start saving, you’d have to save $121 per week to get the same $260,000.

“Essentially, a dollar you save early on in your 20s can be five times more powerful than a dollar you save in your 40s,” says Thakor, director of wealth strategies for women at Buckingham Strategic Wealth.

And if you’re not in your 20s? Retirement saving just got real. The best time to have begun setting aside money was a decade (or more) ago. The second-best time is right now.

Not sure where to start? That’s where the next tip comes in.

3. Educate yourself.

Read personal finance blogs (like this one!) and books. Watch for other opportunities as well; for example, my credit union just announced a free program called “Social Security and Your Retirement.”

Be sure to choose reputable sources. There’s a reason that most money blogs have a disclaimer that begins something like this: “I am not a personal finance professional and the information on this blog is for entertainment purposes only.” Some bloggers pull this information out of thin air or their own experiences.

So lean toward sites run by financial professionals, or sites that interview financial professionals and/or provide reputable sources for their information.

And if you get a postcard inviting you to a local arena to hear about “FREE INSIDER INFORMATION!” or “MONEY SECRETS OF THE MILLIONAIRES,” prepare to be upsold. You will be pressured to buy courses or webinars. Keep your wallet in your pocket – right next to the large grain of salt you’ll need to take along with any “free” info you get at such programs.

(Oh, and read the fine print: That almost certainly won’t be Famous Personal Finance Person running the event, but rather one of his or her minions.)

Wondering if you can stay motivated? If so, time to…

4. Get a money buddy.

The married people surveyed said their spouses keep them motivated and on track financially. That’s a benefit singles don’t have.

Some don’t need it; they can manage their finances just fine. Others are unsure of themselves, or maybe a little daunted/depressed by the idea of saving for retirement on a single person’s salary.

You don’t have to go it alone. Find a relative or friend who’s in the same boat, and become financial accountability partners. This does not mean judging each other, but rather being supportive about budgeting, saving, and other money matters.

Remember to celebrate even the smallest victories. Say that your money buddy decided to pack a lunch three times a week all month and was therefore able to throw extra dollars against the last of his consumer debt. Cheer him on! He’ll do the same for you when you report a success.

And if either one of you backslides? Brainstorm ways to get back on track. It’s also nice to have someone who understands why you’re doing what you’re doing, instead of second-guessing your spending or making fun of you for being a cheapskate.

(You’re not a cheapskate, by the way. You’re making careful, specific choices about your cash.)

5. Save an emergency fund.

The survey noted that 40% of married folks have emergency funds, while fewer than 30% of singles do.

To some extent, a married person’s EF is his or her partner. Should a health problem or major plumbing issue arise, the spouse’s income will help cushion the blow. Unmarried folks? Not so much.

The emergency fund is “something that single folks should be taking much more seriously – they don’t have that second income,” Russell says.

Some money mavens say you need three months’ worth of living expenses. Others say six to 12 months’ worth is better. This may sound difficult (because it is!), but just as with retirement planning, small amounts can make a difference.

Even having $500 in the bank is a good goal. While it may not entirely cover that car repair or medical copay, it’s $500 you don’t have to put on a credit card.

Try this: Swear that within the next 30 days you will set aside at least $50, or about $1.67 per day. Then set out to find the money. Some possibilities: a coffee skipped, a lunch carried, a meatless meal, a shopping excursion declined, a Saturday night spent with Netflix rather than out with friends.

(Note: I offer a free copy of the “Challenge Yourself to Save” chapter of my first book to anyone who asks; it contains 33 examples of what I call “stealth savings.” Contact me at SurvivingAndThriving (at) live (dot) com if you’d like me to send the chapter – no strings attached.)

Once you’ve got that $50 in place, pat yourself on the back – and keep going. Start a separate account for your emergency fund, and promise not to draw from it for anything except a true emergency, i.e., one that can’t be covered with ready cash.

Retirement planning begun, emergency fund seeded. Now it’s time to figure out what to do with the rest of your money. Specifically, you need to…

6. Create a goal (or more than one).

What do want out of life? Where do you see yourself in 10 years, or even in five?

Maybe you’ve never thought that far ahead. If so, then time to do some dreaming. Entrepreneurship, a place of your own, at-home parenthood, early retirement… Your dreams may vary. But it’s a safe bet that what you desire won’t just fall into your lap.

Start by researching what you want. If that’s homeownership, for example, then set out to learn what you need to know. Decide what you want: condo, townhome, single-family home, a duplex whose rental half will help pay the mortgage? Hop online to find out what residences cost in your area. Use your new budget to determine how to save up for a down payment. Look for first-time homebuyer programs in your area, which can offer grants, special interest rates, and other perks.

As you move closer to buying, get pre-approved for a mortgage. You might be surprised by how much you’ll be eligible to borrow – but keep in mind that you don’t have to take it all. If what you want is a single-family home with three bedrooms and a small yard, don’t let a realtor talk you into a McMansion.

Note: You might also be surprised to find out you’re not eligible to borrow at all. That’s why part of your financial goal planning should be to…

7. Build your credit score.

Once again a two-income household has the potential advantage: More money coming in means more buying power. Putting a sustainable amount on plastic (more on that in a minute) and then paying it off is a good way to boost a credit score.

Maybe you’ve already got a decent score. If so, keep it that way (or improve it) by observing the same smart money habits that got you there.

If not? A few credit improvement tips:

Get a credit card. Having one or two cards will improve your score, as long as you don’t overdo it. If you don’t qualify, try getting a secured credit card. And if that doesn’t work, see if you can get added to a relative’s or friend’s card as an authorized user.

Pay your bill in full. A myth that will not die is that carrying a balance improves your credit score. It won’t.

Under-use available credit. Aim to spend less than 30% of your credit limit (preferably closer to 10%). Paying down balances to lower your credit utilization ratio is one of the fastest ways to improve your credit score.

Vary your credit. Buy an appliance or a piece of furniture on installment, if you’re sure you can make the payment. Or take a personal loan from the credit union or bank.

What if you can’t afford to do these things?

When you created your budget, the point was to live below rather than at your current salary. If you’re not earning enough, then you need to get creative about getting your needs met.

Which brings us to the next set of tips:

8. Consider a side hustle.

No matter how careful you are with your cash, it might still be tough to get ahead due to variables like being in a high cost of living area (hello, New York and San Francisco!), student loans, or family medical issues. Sometimes you just don’t earn enough.

Thus, the side hustle: , 44 million U.S. residents now have second jobs, or at least second ways of making money. These extra gigs aren’t always lucrative; only 19% of young people (ages 18 to 36) earn more than $500 per month.

Would you rather have an extra few hundred a month to fund your goals and save toward your dreams, or not? Make it your business to be one of the people who does bring in more than $500, by observing these tips:

Play to your strengths. Some people just aren’t crafty, or at least aren’t crafty on a reliable schedule – if that’s you, don’t open an Etsy store. Folks who are super-organized can earn decent coin as virtual assistants, but the scatterbrained need not apply. Dog-walking can be hugely profitable, but only if you’re dedicated enough to go out in all kinds of weather. Look for something that matches your talents and your inclinations.

Factor in any extra costs. Putting lots of extra miles on your car as an Uber or Lyft driver. Paying for a babysitter and lots more takeout because you’re too tired to cook. Needing an upgraded computer to bid for editing or design jobs. Be clear-eyed about what expenses do to the bottom line.

Designate those dollars. Extra money coming shouldn’t mean extra shopping trips or dinners out. It’s tempting to want to splurge a little; after all, you work so hard! But these are dream dollars, so send them toward your goal – retirement planning, house fund, entrepreneurship, whatever – by stashing them in a separate account. Yes, every time you get paid. (This is where a money buddy can keep you focused: “Dude, you’re more than halfway to having enough to start your own business. Leave it there!”)

Don’t overdo it. Extra works means that burnout is a real possibility. Allow enough time for sleep, socialization and general downtime. Set a reasonable year-round goal, with the knowledge that you might pick up extra hours during certain times of the year (extra crafts traffic in November and December, say, or more Lyft calls during major league playoffs).

9. Learn to cook – and make coffee.

You’re probably sick of hearing about the “latte factor” (which should probably be changed to the “avocado toast factor” for the current generation). But according to the U.S. Department of Agriculture, we spend about one-third of our food dollars on meals away from home.

“I don’t have time to cook” or “I don’t know how to cook” aren’t good enough reasons. So many options exist to help you put together simple, healthy, and inexpensive meals that will save you thousands of dollars per year.

The “Good and Cheap” cookbook, based on the SNAP budget of $4 per day, is available as .

10. Get a roommate.

Having a roommate means cutting housing expenses in half. Or maybe more than half, if you own a place: A guy I know has two roomies whose combined rents pay about two-thirds of his mortgage. For those living in high-rent cities like Boston, the savings .

Choose with care, however. A woman I know (call her “Jay”) wound up sharing with people she barely knew and things turned ugly. When one roommate was asked politely to keep it down at night, she purposely made extra noise when Jay was trying to sleep. Another roomie invited people to stay over on a long-term basis, to the point where Jay couldn’t use the living room and was in fact afraid of some of the guests.

If you don’t want a roommate? Look for a better deal on housing, and put the money you save toward retirement, that emergency fund or paying down debt.

The takeaway:

Being single can be financially challenging. Rise to the test and take charge of your cash.

Don’t believe the idea that if you can’t save big you might as well not save at all. Obviously it can be daunting, especially if you have student loans and a starter salary, and it’s tempting to feel sorry for yourself: All the couples I know make so much more than I do, and they get a break at tax time, and they have each other while I’m still single.

Don’t compare yourself to other people. Instead, make smart choices with your own money, so that you can take care of all of your needs and at least some of your wants. Because yes, you are allowed some treats. Just take care of business first.

Doing so will mean building a life that’s comfortable and financially sound. You’ll be surprised how good a little reorganization can make you feel.

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